Conn's, Inc. (NASDAQ:CONN) fell hard Tuesday on the release of third-quarter financial numbers.
The specialty retailer of furniture and mattresses, home appliances, consumer electronics and home office products, based in The Woodlands, Texas, reported that net income for the three months ended October 31, 2019 was $15.1 million, or $0.51 per diluted share, compared to $14.6 million, or $0.45 per diluted share, for the prior-year quarter.
Retail revenues were $280.3 million compared to $284.1 million for the prior-year quarter, a decrease of $3.7 million or 1.3%. The decrease in retail revenue was primarily driven by a decrease in same store sales of 8.4%, partially offset by new store growth.
The decrease in same store sales was driven by a decrease of 12.8% in markets impacted by Hurricane Harvey, and by a decrease of 6.7% in markets not impacted by Hurricane Harvey.
For the three months ended October 31, 2019 and 2018, retail segment operating income was $19.6 million and $35.3 million, respectively.
According to CEO Norm Miller, "For the first time in five and a half years, Conn’s produced positive credit segment income before taxes, primarily as a result of a third quarter credit spread of 1,070 basis points. This is a significant milestone for the company and validates our 1,000-basis point credit spread operating strategy.
"Our credit model is the foundation of our overall business and enables our unmatched value proposition for our core customer, while providing us the flexibility to support our retail growth strategy."
Shares in CONN stumbled $5.70, or 27.8 to $14.80
